Caution! Disruption ahead
As a Silicon Valley resident, inveterate technology watcher, and amateur futurist, I’ve learned to be cautious about predicting the fate of startups with innovative ideas. Many whose planned products looked promising to me have failed. (I should know; over the years, I’ve worked for several.) Others that I would have dismissed out of hand, had I known about them before they arrived on the scene, have emerged from nowhere and gone on to wild success. Go figure!
Aware of that history, I surprised myself in my reaction to a recent news item. A company founded by a group of former SpaceX employees had just emerged from stealth mode. They announced a raise of nearly $50 million in series A funding to develop an intriguing idea. My reaction, after learning what I could about the company: unbridled enthusiasm! Caution thrown to the wind! Were I young enough to be employable, I’d be knocking at their door, resume in hand, offering to work for stock options. A glutton for punishment, I suppose.
The company is Parallel Systems. Their idea: autonomous battery-electric rail vehicles that move freight. In light of the EV revolution, it may not sound all that radical. But the system they’re planning has some surprising features. It isn’t self-contained rail cars that they’ll be building. It’s self-powered autonomous bogie assemblies. The bogies will work in pairs to transport cargo containers, as illustrated in the photo below from a company brochure.
The bogies plus cargo container weigh only about half of what a regular container carrier car plus cargo do. (Rail cars are heavy.) A number of these units traveling in close platoon formation are also more aerodynamic. Lower weight and lower air resistance allow them to transport cargo more efficiently than regular trains – which are already noted for high energy efficiency. The powered bogies are stated to have a practical range of 500 miles on one battery charge. They can recharge in an hour. But cargo containers can also be lifted from a nearly spent pair of bogies and set down on another. Express cargo won’t have to wait for recharging.
Of arguably more importance than energy efficiency are the flexibility and operational simplicity that the system architecture facilitates. The requirement for large switch yards for making up and breaking down mile-long freight trains is bypassed. Switchyards typically require 100 acres or more of land. But under the Parallel Systems model, individual cargo units don’t need a switchyard to join or leave platoons. They’re like highway trucks that can join or leave a rolling convoy at any freeway ramp. That allows cargo containers to be delivered directly to factory, warehouse, or dock, without bringing the train / platoon along. The same applies for picking up loaded containers. The model’s avoidance of big switch yards facilitates expansion of the highly efficient rail transport network to portions of regional and local markets now served only by trucking companies.
Streamlined and energy-efficient handling of cargo has high value for the economy. Businesses served by the system should experience faster turnarounds on shipping and lower overall costs. But widespread implementation will not be easy, and success is not assured. As always with new business proposals, “the devil is in the details''. I’d be the last person to minimize the challenges in what Parallel Systems is trying to do. The operational challenges of integration with multiple legacy systems for cargo scheduling and dispatch may be especially formidable. But as a former software engineer and systems architect, I don’t see any showstoppers. Of course, in the software industry, “I don’t see any showstoppers” can end up as “famous last words”.
But can they execute?
To me the technical merits of what Parallel Systems wants to do are no-brainers. Together, rail and truck cargo transportation account for nearly 8% of domestic CO2 emissions. Switching half of that haulage to an efficient zero-emissions rail system would cut those emissions by 650 million tonnes a year – a worthy goal. Because of the high efficiency and low materials use of Parallel Systems’ autonomous bogies, I see the system as a good approach to achieve that goal. A happy side effect is that the energy storage capacity in the battery packs of idle units should facilitate integration of clean energy resources on the grid. With timing and duration of vehicle operations scheduled well in advance, the units should be well placed to deliver VTG (vehicle-to-grid) services. The revenue from ancillary services will be icing on the system’s efficiency cake.
Technical merits aside, the question is, will Parallel Systems’ leadership team be able execute on the concept? I’d expect the hardware and firmware parts of system development to go fairly smoothly. There will certainly be problems, and the problems will have developers working long hours at times. But engineers – at least the younger ones – are good at that. The problems will ultimately get sorted and the hardware will work. Early versions of the software for scheduling and dispatch will also work well enough for demonstration purposes. But then what?
In the startup world, working hardware and demo software are just entry tickets for the real game. For this type of infrastructure-related system in particular, getting systems sold and into the field will be the big challenge. Institutional barriers will have to be surmounted; the nature of the railroad industry won’t make that easy. There are probably exceptions, but on the whole, rail companies are old and notoriously conservative. The industry is heavily unionized, and the unions are fiercely protective of members’ jobs. Moreover, the US rail network is a patchwork of lines all owned by private companies. Securing agreements to link with and operate on all those lines won’t be easy. Even if the various private companies are, in principle, willing to cooperate, coordinating among various legacy systems for scheduling and dispatch will be a headache. Then there are the port authorities and county planning commissions who will have to authorize any new works.
Test case for climate action
To me, the interesting thing about Parallel Systems is that it represents a good test case for our ability, as a nation, to move forward on meaningful climate action. What the company is trying to accomplish has clear economic and environmental benefits that are worth pursuing. Much of the value, however, will be indirect. Indirect value won’t accrue directly to investors in the company – a complication for business plans. Implementation will require the cooperative participation of multiple private companies and public authorities. It will face opposition from players who, rightly or wrongly, will see it as contrary to their interests. In short, it’s a large undertaking that will face much the same problems that will confront any major climate action. At the same time, it’s small enough and its impacts manageable enough to have a real chance of success. It doesn’t require any basic paradigm shift, beyond the already recognized need to decarbonize our transport sector. In a rational society, it would be a shoo-in.
The problem is, we don’t seem to be living in a particularly rational society. Long term goals and planning are given short shrift, the common good is sacrificed on the altar of selfish interests, white collar crime and corruption are rampant, or appear to be. That may be an illusion – the result of a corporately owned media system focused on ad revenue rather than public service. Controversy is good for ratings. I hope that’s all it is, and that underneath the divisiveness and polarization, there remains a core of social sanity and regard for the common good. We’ll see.
If Parallel Systems can succeed, I’ll take it as a sign of hope. Maybe it will inspire other acts of creative disruption that will be needed to set this world on track. If it flops, well, I suppose I’ll cross that bridge if and when I come to it. In the meantime, my message to the folks at Parallel Systems is “Go team! I’ll be watching you. And I'll be rooting for you!”